BAT Offers $47 B to Buy Remaining Reynolds Stake, Daimler Net Surges 13%

Sarla Buch
21 Oct, 2016
New York City

British American Tobacco offered for the remaining 58% stake in the U.S.-based Reynolds American for

[R]4:00 PM Frankfurt – British American Tobacco offered for the remaining 58% stake in the U.S.-based Reynolds American for £38 billion. Daimler profit surged 13%. Ericsson net and revenues plunged. Shell plans to sell energy assets in western Canada for $1 billion.[/R]

In London trading, FTSE 100 index fell 9.92 to 7,017.33 and in Frankfurt the DAX index slid 5.03 to 10,696.26.

In Paris, CAC 40 index slipped 20.10 or 0.4% to 4,520.02.

For the week, FTSE 100 index edged up 0.07%, the DAX index increased 1.1% and the CAC 40 index jumped 1.4%.

British American Tobacco Plc slipped 0.8% to 4,764.50 pence after the U.K.-based tobacco products maker offered for the remaining stake of 57.8% in the U.S.-based Reynolds American Inc. $56.50 per share valued at £38 billion or $47 billion.

BAT already owns 42.2% stake in Reynolds and offer represents a 20% premium to Reynolds’s closing price of October 20.

“Settlement is proposed a mix of $24.13 in cash and 0.5502 shares for each Reynolds share,” chief executive Nicandro Durante said.

Separately today the tobacco products maker reported revenues in the nine-month period ending in September soared 8.1% from a year ago period after the cigarette volume from subsidiaries jumped 2.2% to 497 billion.

Daimler AG slumped 2.6% to €64.32 after Germany-based luxury passenger car and commercial vehicles maker reported revenues in the third-quarter ending in September jumped 4% from a year ago to €38.6 billion.

Net profit in the quarter surged 12.8% from a year ago to €2.7 billion compared to the €2.4 billion.

The group said operating profit in the quarter soared 10.4% to €4.04 billion and unit sales in the quarter advanced 5% to 754,100 vehicles from a year ago period.

Daimler added operating profit in Mercedes-Benz Cars segment surged 23%, mainly due to 11% jump in passenger car sales to 565,600 vehicles after launching the new E-class and continued strong demand for sports utility vehicles.

Revenue in the Mercedes-Benz division soared 12% to €23.3 billion, the best-ever figure in the third-quarter.

In the quarter, sales in the Daimler Trucks business plunged 24.4% to 97,100 units from 128,500 units and revenues declined 19% to €7.9 billion from a year ago period.

Telefonaktiebolaget LM Ericsson plummeted 4.3% to 46.75 Swedish kronor after Sweden-based communications services provider said net sales in the third-quarter slumped 14% from a year ago to 51.1 billion kronor.

Net income in the quarter tumbled 106% from a year ago to 0.2 billion kronor compared to the 3.1 billion kronor and diluted earnings per share dropped to 0.07 kronor from 0.94 kronor.

Ericsson said sales in North America declined for second consecutive quarter to 8%, to 13.2 billion kronor that mainly due to lower sales in professional services in business supports and maintain networks.

However, the telecom company added sales in the most of the regions, including Europe, India and mainland China.

Royal Dutch Shell Plc slid 0.2% to 2,073 pence after the U.K.-based oil and gas producer said plans to sell 16 upstream oil and gas assets in western Canada worth about $1.03 billion to Tourmaline Oil Corp.

The sales are part of three-year asset sales program for about $30 billion.